House subcommittee bill would strip $74.8 million from Wayne State, U-M campuses

Mar. 19, 2013

House Republicans believe Wayne State’s contract was signed simply as a way to avoid right-to-work laws set to go into effect next week. The controversial law makes it illegal to require financial support of a union as a condition of employment, but contracts in effect on March 27 won't be affected until they expire. / Paul Sancya/Associated Press

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Detroit Free Press Education Writer

Republicans in the state House took a hard financial slap at two Michigan universities Tuesday morning, passing a funding bill through a subcommittee that would strip a total of $74.8 million in state aid from Wayne State University and the three University of Michigan campuses.

The move is in retaliation for the universities agreeing to labor contracts that were seen by Republican lawmakers as an end run around the state's new right-to-work law.

The cuts, if passed into law by the full Legislature, would likely require a tuition increase for Wayne State students, WSU spokesman Matt Lockwood said.

The bill, passed by the House higher education appropriations subcommittee on a straight party-line vote, holds out 15% of a university’s performance funding to only those universities who did not sign or renew union contract between Dec. 10, 2012 and March 28, 2013, that did not generate at 10% savings. It now heads to the full appropriations committee.

Republicans are targeting WSU, which signed an eight-year agreement with its faculty union. The WSU Board of Governors, which is heavily Democratic, will vote Wednesday on the contract.

Also in the crosshairs is U-M, which has a tentative agreement with its lecturer’s union. That contract covers U-M Ann Arbor, U-M Flint and U-M Dearborn.

House Republicans believe WSU’s contract was signed simply as a way to avoid right-to-work laws set to go into effect next week. The controversial law makes it illegal to require financial support of a union as a condition of employment, but contracts in effect on March 27 won't be affected until they expire.

Under the right-to-work law, employees have the right to opt out of unions and not pay dues. But under the new WSU faculty contract, that would not be possible for the next eight years; faculty members would have to either join the union, pay a service fee, contribute to a university scholarship fund, or opt to have the university withhold 2 days pay.

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“I think we’ve sent a serious message here,” said Rep. Al Pscholka, R-Stevensville, the subcommittee’s chairman. “This has to do with trying to circumvent state law. An eight-year contract doesn’t stand up for taxpayers. It’s very blatant what’s going on here.”

Without the penalty, WSU would get $184 million next year in state aid. U-M woud get $250 million.

WSU administrators decried the move.

“This legislation is punishment in reaction to an eight-year contract that was concluded as part of the normal negotiations process, and well within the legal requirements of Right to Work,” spokesman Matt Lockwood said in a statement. “We are stunned and saddened that the Legislature would take such measures in reaction to a contract that is both good for the university and perfectly legal. This is a case of legislators questioning the judgment of people who understand and are responsible for the best interests of the uiversity.

“While some legislators may feel satisfied, a cut of this magnitude will harm not only the university, but the people and community it serves, and most importantly, our students. There is no magic to university budgeting; when appropriations decrease this severely, a university cannot cut its way to a balanced budget. We will have no choice but to raise tuition.”

The reaction was more muted at U-M. Cynthia Wilbanks, the university’s vice president for government relations, would not comment directly on the bill, but said there was a lot of work still to do on it and the university hoped the bill at the end of the legislative process looked different than it currently does.

Democrats on the subcommittee tried to get the contract punishment lifted, but failed on party-line votes several times.

“How does one circumvent a bill that isn’t in effect?” asked Rep. Sean McCann, D-Kalamazoo.

His colleague, state Rep. Sam Singh, D-East Lansing, also fought against it.
“Today, we decided to move politics ahead about good policy,” he said. “I do not believe we should harm the students of these institutions because of the political manuerving.”

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Republicans, however, said all they were doing was protecting students from the union’s politics.

The bill overall, proposes a 2.2% increase in higher education funding. It also requires universities to keep tuition raises under 3% for next year in order to qualify for a portion of the funds.

The House Appropriations subcommittee for School Aid passed similar language in the budget passed on Tuesday, cutting performance funding for K-12 public schools that passed long term contracts before right-to-work legislation takes effect March 28.

If the districts are able to prove the contracts realize a 10% savings in things like wages, benefits and pensions, the performance funding will stand.

So far, the Warren and Taylor public school districts have passed contracts in recent weeks.

State Rep. Brandon Dillon, D-Grand Rapids, objected to the language saying ”It’s obvious this isn’t about furthering education, it’s about continuing an ideological, divisive debate. They just want to keep pounding the issue over and over.”

But state Rep. Bill Rogers, R-Brighton, said leadership in the state House wanted the language included in the bill and would keep districts in check when negotiating new contracts.

“We’ve got a lot of schools that are having financial difficulty,” he said. “And we’re trying to make sure and encourage that some of the boards don’t go overboard and promise things they can’t afford.”

The districts will have to go to a certified public accountant to ensure that the contracts will result in a 10% savings to the district. That will then be turned over to the state Department of Education for verification.

The budgets have to go to the full Appropriations committee in the state House and Senate.

The Warren Consolidated School district, which started negotiating a new contract long before the right-to-work bill passed the Legislature last year, has not applied for or received performance-based funding, said school district spokesman Bob Freehan. So they will not suffer any loss of state funding because of the 8-year contract passed earlier this month.